But it is crucial to ensure that the trust is properly set up, he says.

On a recent seminar held aboard a cruise ship going from Los Angeles to Mexico in January, Phillips examined some 35 or 40 trust agreements brought to him by wealthy people on board. Only three or four would have survived an IRS tax audit, he says.

"Many people, especially older people, are constantly getting solicitations from lawyer's groups or financial advisers to set up a trust," says David Bendix, a financial planner who heads up Bendix Financial Group in Uniondale, N.Y.

But the reasons are not altogether altruistic: Attorneys and other financial specialists can often make far more money from setting up a trust - which can cost anywhere from $100 for a simple trust to several thousand dollars for a complex estate - than from setting up a will, which "usually costs less than $500," says Mr. Bendix.

Still, large numbers of trusts are being set up nowadays because they are far superior ways of disposing of estates than wills, trust attorneys insist.

"There is an increasing awareness of the benefits of living trusts," says Andrew Willms, an attorney who does extensive trust work in Milwaukee.

Trusts have become especially common in states where probate is fairly expensive, such as California and New York.

Mr. Willms tells his clients that unless there is a special reason for not having a trust, they are almost always better off setting up a trust.

A buyer's profile

Who should set up a trust? At least seven groups, says Paula Hogan, a financial planner in Milwaukee:

1. Older people who worry they won't be able to care for themselves at some point.

2. Families with dependent children or adult dependent children who may need special care.

3. Individuals who would like to set up a gift for a child, but fret over the money being misused when the child reaches the legal age of maturity.

4. Those who travel extensively. A trust can be set up with a co-trustee who would handle financial matters while the owner of an estate is away.

5. People who own homes in several states. Instead of having to go to probate in each state, the homes can be left to others within the trust.

6. Those who want the disposition of their estate kept secret. Trusts are private documents. On the other hand, wills are public documents which can be examined by outsiders.

7. People with simple estates who want their assets all in one place for eventual disposition at the time of death.

Irrevocable trusts are dispositions locked in stone, usually outside the control of the person who sets up the trust.

Revocable or "living" trusts let the person who establishes the trust make changes, or even abolish it.

"The main advantage to a living trust is that it can be ongoing - continuing on well after the death of the person setting up the trust," says Willms.

Trusting your children

While living trusts come in handy for those with heirs that are impulsive or reckless with money, Willms says they can also benefit parents of responsible adults.

Perhaps their son or daughter is in a career where they can be easily sued, such as law, or medicine.

If assets were transferred to them at the time of the parent's death, the monies could eventually be attached by others, as part of a legal settlement.

But if the assets are put in a trust, with what is called a "spendthrift clause," they would become almost impossible to reach in a subsequent lawsuit against the adult child, Willms says.

But in the meantime, the heir can still use the funds in the trust for all legitimate purposes. And the monies in the trust can even be passed along to grandchildren, bypassing a tax burden for the first beneficiary, he says.